ARK Invest Report: Stablecoin Growth Slows Post-October Shock, Base Network Leads

VADODARA, January 29, 2026 — ARK Invest's quarterly report reveals stablecoin supply growth decelerated sharply following an October market shock, despite total supply surpassing $300 billion. This daily crypto analysis examines the redistribution of on-chain activity, with Base network transaction volume surging 121% to $3 trillion, while Ethereum and Tron followed. Market structure suggests this shift mirrors liquidity fragmentation patterns seen in 2021.

Investigation: ARK Invest's Stablecoin Supply Analysis

ARK Invest stated in a quarterly report that total stablecoin supply exceeded $300 billion at the end of 2025. According to The Block, which cited the report, overall growth slowed since a market volatility shock in October. The report noted DeFi's role as a payment layer continued expanding in Q4, but the shock triggered activity redistribution across networks. During that period, Base network led stablecoin transaction volume with around $3 trillion, marking a 121% increase from Q3. Ethereum and Tron followed in volume rankings.

Market Context & Historical Precedent

Historically, stablecoin supply growth correlates with bull market liquidity inflows. Similar to the 2021 correction, where Tether (USDT) supply plateaued after May's crash, the current slowdown suggests institutional capital deployment has paused. In contrast, the 2023-2024 cycle saw stablecoin supply expand steadily alongside Bitcoin ETF approvals. Underlying this trend, the October shock likely triggered a Liquidity Grab, moving capital from speculative altcoins back to core assets. Consequently, networks like Base captured volume as users sought lower-fee environments, reminiscent of Solana's rise during the 2021 NFT boom.

Related developments include recent futures liquidations exceeding $130 million amid market fear, and DePIN sector growth to a $10 billion valuation despite broader volatility.

Technical Architecture & Price Action

On-chain data indicates stablecoin supply acts as a proxy for buying pressure. A slowdown typically precedes consolidation phases, as seen in Q2 2022 when supply stagnated before Bitcoin's drop below $20,000. Currently, the $300 billion level represents a psychological resistance; a break above could signal renewed institutional interest. Market structure suggests watching the 50-day moving average of aggregate stablecoin supply for trend confirmation. , Base network's surge highlights the impact of EIP-4844 blobs reducing transaction costs, a technical upgrade not detailed in ARK's report but critical for scalability.

By The Numbers

Why It Matters

Stablecoins serve as the primary on-ramp for crypto trading. Slower growth implies reduced fresh capital entering markets, potentially compressing DeFi yields and increasing altcoin volatility. Institutional liquidity cycles often hinge on stablecoin metrics; a prolonged slowdown could delay the next leg up in Bitcoin's price. Retail market structure shows sensitivity to these shifts, with exchange inflows declining during such periods. Evidence from Ethereum's official analytics indicates network fee reductions have not fully offset the shock's impact.

Expert Commentary

"The October shock created a Fair Value Gap in liquidity distribution. Base's outperformance reflects a flight to efficiency, similar to how Layer 2s gained traction post-Merge. However, sustained growth requires stablecoin supply expansion to resume." — CoinMarketBuzz Intelligence Desk

Market Outlook & Price Scenarios

Market structure suggests two primary scenarios based on stablecoin dynamics. First, if supply growth accelerates above $310 billion, it could fuel a rally toward Bitcoin's previous all-time high. Second, continued stagnation may lead to range-bound trading below $90,000. The 12-month institutional outlook depends on macroeconomic factors like Fed policy, but on-chain trends indicate a cautious stance until liquidity improves.

• Bullish Invalidation Level: $98,000 resistance. A break above, coupled with stablecoin supply growth, would confirm trend reversal.
• Bearish Invalidation Level: $82,000 support. A breach below, amid slowing stablecoin growth, would signal deeper correction.